I am pretty sure he seized it, and then tried to tighten the sprocket thinking that would do something....then found that the nut would thread past the threads on the shaft and that entered (needlessly) into the equation.
I think there is a serious problem in the crankcase. Does the piston or rod have any up and down slack in them?
By the look of the piston with all those dings around it's edge, there's obviously some metal particles been loose in your engine. First thing I would suspect is the wrist pin or rod needle bearing failure.
There's still metal loose in there somewhere and that's what is giving you the cyclic resistance to turning the crankshaft.